Bridge Realization Estimate
ML model predicts what fraction of the bridge is achievable (accuracy: 60%, n=5,839)
Expected realization: 71% of modeled bridge. Strengths: Occupancy Rate, Revenue per Bed. Risks: Bed Count. Risk-adjusted uplift: $53.6M (vs $75.3M modeled).
EBITDA Bridge — 7 RCM Levers
Each bar shows the annual EBITDA impact at full run-rate. Revenue levers increase top-line; cost levers reduce operating expense; cash acceleration releases working capital. Calibrated to published research bands (Denial 12%→5% = $8-15M on $400M NPR).
Lever Detail
Each value shows its data source. SELLER = seller data room, DEFAULT = model default, BENCHMARK = P75 peer benchmark.
| Lever | Current | Target | Revenue | Cost | EBITDA | WC | Ramp |
|---|---|---|---|---|---|---|---|
| Cost to Collect | 4.5% DEFAULT | 2.5% BENCHMARK | $0 | $28.6M | $28.6M | $0 | 12mo |
| Denial Rate Reduction | 12.0% DEFAULT | 6.5% BENCHMARK | $27.6M | $787K | $28.3M | $0 | 12mo |
| A/R Days Reduction | 52.00 DEFAULT | 38.00 BENCHMARK | $4.4M | $13.0M | $17.4M | $54.9M | 9mo |
| Clean Claim Rate | 88.0% DEFAULT | 96.0% BENCHMARK | $0 | $916K | $916K | $0 | 6mo |
| Net Collection Rate | 93.5% DEFAULT | 28.5% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
| CDI / Case Mix Index | 135.0% DEFAULT | 142.0% BENCHMARK | $0 | $0 | $0 | $0 | 18mo |
Implementation Timing Curve
Linear ramp to full run-rate per lever. Month 0 = close date. Partners should expect 60-70% of total uplift realized by month 12.
| Lever | M0 | M3 | M6 | M9 | M12 | M18 | M24 | M36 |
|---|---|---|---|---|---|---|---|---|
| Cost to Collect | $0 | $7.2M | $14.3M | $21.5M | $28.6M | $28.6M | $28.6M | $28.6M |
| Denial Rate Reduction | $0 | $7.1M | $14.2M | $21.3M | $28.3M | $28.3M | $28.3M | $28.3M |
| A/R Days Reduction | $0 | $5.8M | $11.6M | $17.4M | $17.4M | $17.4M | $17.4M | $17.4M |
| Clean Claim Rate | $0 | $458K | $916K | $916K | $916K | $916K | $916K | $916K |
| Cumulative | $0 | $20.5M | $41.0M | $61.1M | $75.3M | $75.3M | $75.3M | $75.3M |
Returns Sensitivity (IRR / MOIC)
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Green = exceeds 20% IRR hurdle. Amber = 15-20%. Red = below hurdle or loss. RCM uplift of $75.3M is added at exit.
| Entry \ Exit | 9.0x | 10.0x | 11.0x | 11.5x | 12.0x |
|---|---|---|---|---|---|
| 8.0x | 108% / 38.9x | 113% / 43.6x | 117% / 48.3x | 119% / 50.7x | 121% / 53.0x |
| 9.0x | 103% / 34.3x | 107% / 38.4x | 112% / 42.6x | 114% / 44.7x | 116% / 46.8x |
| 10.0x | 98% / 30.5x | 103% / 34.3x | 107% / 38.0x | 109% / 39.9x | 111% / 41.8x |
| 11.0x | 94% / 27.4x | 99% / 30.9x | 103% / 34.3x | 105% / 36.0x | 107% / 37.7x |
| 12.0x | 90% / 24.9x | 95% / 28.0x | 99% / 31.1x | 101% / 32.7x | 103% / 34.3x |
Covenant Headroom (at 10x Entry, 6.5x Max Leverage)
Pro forma EBITDA can decline 77% before the 6.5x covenant trips. RCM uplift reduces leverage from 8.5x to 1.5x, adding 7.0 turns of cushion.
5-Year Value Creation Waterfall
EBITDA trajectory: 3% organic growth + RCM uplift ramp (full run-rate at month 18).
| Base EBITDA | RCM Uplift | Total | Margin | |
|---|---|---|---|---|
| Entry | $16.3M | — | $16.3M | 1.1% |
| Year 1 | $16.8M | +$50.2M | $67.0M | 4.7% |
| Year 2 | $17.3M | +$75.3M | $92.6M | 6.5% |
| Year 3 | $17.8M | +$75.3M | $93.2M | 6.5% |
| Year 4 | $18.4M | +$75.3M | $93.7M | 6.5% |
| Year 5 | $18.9M | +$75.3M | $94.2M | 6.6% |
Achievement Sensitivity
What if we only achieve a fraction of each lever? 50% = conservative, 75% = base management case, 100% = plan, 120% = stretch.
| Lever | 50% | 75% | 100% | 120% |
|---|---|---|---|---|
| Cost to Collect | $14.3M | $21.5M | $28.6M | $34.4M |
| Denial Rate Reductio | $14.2M | $21.3M | $28.3M | $34.0M |
| A/R Days Reduction | $8.7M | $13.1M | $17.4M | $20.9M |
| Clean Claim Rate | $458K | $687K | $916K | $1.1M |
| Total | $37.7M | $56.5M | $75.3M | $90.4M |
Peer Context — Where This Hospital Sits
Key metrics vs 14 size-matched peers. Low percentile on margin/efficiency metrics = more room for improvement = larger bridge opportunity.
| Metric | Hospital | P25 | P50 | P75 | Percentile |
|---|---|---|---|---|---|
| Op Margin | 1.1% | -2.2% | 2.9% | 8.0% | P43 |
| Net-to-Gross | 26.3% | 18.0% | 23.8% | 28.5% | P57 |
| Occupancy | 79.2% | 75.3% | 77.5% | 81.9% | P57 |
| Rev/Bed | $2.6M | $1.4M | $1.6M | $2.0M | P86 |
| Exp/Bed | $2.6M | $1.2M | $1.6M | $1.8M | P86 |
Bridge Methodology
Coefficients calibrated to published research bands: denial 12%→5% = $8-15M on $400M NPR. Current metrics estimated from HCRIS public data and ML predictions. Target metrics set at P75 peer benchmarks with 60% gap closure assumption. Revenue levers use NPR × delta × avoidable share. Cost levers use claims volume × cost per reworked claim. Working capital from AR reduction is one-time cash (not included in recurring EBITDA). Returns assume 5.5x leverage, 3% organic growth, 10%/yr debt paydown.